That sounds reasonable. There is clear logic and a sincere attempt at having realistic expectations from Mamdani's 'new' tax idea.
I have read a few of your replies and can tell you likely value being logical, realistic, and open minded, so I will set aside my usual approach. I agree with you that we probably will not see a mass exodus from NYC, but possibly for different reasons, not really sure. I think many who could leave easily have already left. Those with deeper roots, family, businesses, or strong personal ties tend to stay and endure it until they reach a breaking point. That breaking point is approaching but still a ways off.
That said, what about a steady, regular exodus? Even if only a relatively small number of billionaires and high earners leave, is it not reasonable to assume NYC loses far more than just the new second home tax revenue? Many of those leaving will take their businesses, investments, and employees with them. That is when the real revenue loss begins.
This is not just speculation. We have decades of examples from cities, states, and other countries that have tried similar punitive tax policies. It is like science. You form a hypothesis, run the experiment repeatedly, and when you observe consistent results, you come up with a conclusion. The verdict on high punitive taxes is already in. They never produce the projected revenue much beyond the first year or two and always end up collecting less than before. Usually collecting less from the specific increased or created tax buy always when attributed losses are included in the calculus.
Governments then compound the problem with baseline budgeting. Spending programs funded by optimistic projections never go away. Instead, budgets automatically increase every year, creating a snowball effect in the wrong direction.
The fact that Mamdani quickly dropped his threshold from 5 million to 1 million, this tax will very likely follow the same pattern quicker than most. When you factor in the collateral damage, lost income tax, business departures, declining property values, and reduced economic activity, it's hard to imagine how anyone expects it to work. At some point it starts to seem intentional and targeted for other much deeper reasons than balancing a budget. Putting that aside, the reality that it won't pay for the programs depending on the revenue will cause the predictable shortfalls. Then what? The blame game starts and the search for other ways to punish those blamed begins again.
History has proven this time and again. Raising taxes to punitive levels always results in less revenue in the end, not more. The founders knew this very well because they were student of history and just as important, they were students of human nature. The laws of human nature say that people will pay what they see as reasonable without any coercion, threats, or punitive policy. Free people with morals have no problem paying for the things that preserve their way of life and truly benefit the citizens. Again, we can prove this by looking at past examples and studies.
I want to add the results from a simple question I just put to AI to back up what I've said. I simply asked for a few examples of tax revenues increasing as a result of lowering tax rates and provide evidence that non-punitive or fair tax rates increases compliance resulting in more revenue collected.
I know I've said a lot, but I'd like anyone that disagrees to focus on one element of all of this. Find a single example of any wealth tax of any kind that worked as projected for very long.
**Yes, there are solid historical examples and studies supporting both points.**
### 1. When taxes are seen as "fair" and reasonable, Americans voluntarily comply at very high rates
- The U.S. has one of the **highest voluntary tax compliance rates** in the world (around **83-85%** for income taxes), even with a complex code. This is largely because most Americans view the overall system as reasonably fair when rates aren't extreme.
- Studies on **perceived fairness** (e.g., NBER 2024 paper and others) show that when people believe others are paying their fair share and rates aren't punitive, compliance rises significantly. People are far less likely to appeal, evade, or use aggressive loopholes.
- Historical low-tax periods (1950s-1960s under Eisenhower/Kennedy before the big hikes, or post-Reagan) show strong voluntary compliance without heavy IRS enforcement.
### 2. Lowering high/punitive tax rates has repeatedly increased revenue
**Key takeaway from studies:**
- Arthur Laffer and many economists (including Treasury analyses) point to these as textbook cases of the Laffer Curve in action: when marginal rates are very high (70%+), cutting them encourages work, investment, and reporting of income, which grows the tax base enough to offset the lower rate.
- Lower rates also reduce tax avoidance and evasion, so people pay more willingly instead of spending time and money on loopholes.
| Period | Top Marginal Rate Change | Result on Revenue |
|---|
| 1920s (Coolidge/Mellon) | 73% → 24% | Tax revenues rose sharply. Top 1% paid a much larger share of total taxes. |
| 1960s (Kennedy) | 91% → 70% | Real federal tax revenues grew strongly (over 6% per year). Economy boomed. |
| 1980s (Reagan) | 70% → 28% | Individual income tax revenue nearly doubled from $244B (1980) to $446B (1989). Economy expanded dramatically. |
